Orbitz Worldwide said an Illinois court ruled in favor of a request for injunctive relief against AMR Corp.'s (AMR) American Airlines, forcing the carrier to make its flights available on the travel website. Orbitz shares surged after hours, climbing 54% to $3.40. Shares are off 60% so far this year amid the ongoing dispute.
Esterline Technologies' fiscal second-quarter profit jumped 55% as strong growth in the commercial-aircraft sector lifted sales in the company's main avionics and controls segment. Shares of the aerospace and defense manufacturer rose 4.1% after hours to $76.50 as the results easily beat analysts' expectations. The company also raised its full-year earnings outlook for the third time.
Vera Bradley's fiscal first-quarter earnings dropped by a third as a higher tax burden masked higher direct sales from the company's namesake stores. Shares were off 8.4% after hours to $43.64.
Coldwater Creek Inc. (CWTR) swung to a fiscal first-quarter loss as the women's retailer continued to experience poor traffic and an underwhelmed customer response to merchandise, a result forewarned last month. Shares were down 3.3% at $1.77 after hours.
Aastrom Biosciences Inc. (ASTM) said it met the primary goals of a trial examining the safety and efficacy of ixmyelocel-T, a treatment for a disease that obstructs blood flow in patients' extremities. Shares in the emerging biotechnology company were up 4.9% at $3.19 after hours on the news.
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Dollar General Corp.'s (DG, $31.81, -$3.26, -9.30%) fiscal first-quarter profit jumped 15% as customer traffic and average transaction sizes contributed to higher same-store sales. But the retailers' earnings-per-share fell short of analysts' expectations.
Marathon Oil Corp. (MRO, $52.65, -$1.52, -2.81%) agreed to buy South Texas oil assets owned in part by private-equity firm Kohlberg Kravis Roberts & Co. for $3.5 billion in one of the largest deals yet in the up-and-coming Eagle Ford oil and gas shale. The transaction is one of the largest in the oil-rich play, and although Marathon should see high returns on its investment fairly quickly, Oppenheimer's Fadel Gheit says the high price has turned many investors off.
Jos. A. Bank Clothiers Inc. (JOSB, $49.51, -$7.59, -13.29%) fiscal first-quarter profit jumped 13% on higher sales and margins, though the results fell short of Wall Street's expectations.
Weak jobs and housing picture could mean more mortgage and credit-card delinquencies. They also mean a bleaker consumer-lending outlook. Financials are taking it hardest, and many on the Street see a direct line from bad data to financials' downdraft Wednesday. "Some of the improvement in the credit metrics might slow or come to a bit of a halt," says Nick Kalivas, strategist and VP of financial research at MF Global, adding that a weak labor market suggests worsened loan demand and an even tougher road for housing. Bank of America Corp. (BAC, $11.24, -$0.50, -4.26%), Regions Financial Corp. (RF, $6.54, -$0.52, -7.37%), Huntington Bancshares Inc. (HBAN, $6.35, -$0.25, -3.79%), BB&T Corp. (BBT, $25.95, -$1.59, -5.77%) and J.P. Morgan Chase & Co. (JPM, $41.76, -$1.48, -3.42%) all declined.
Lions Gate Entertainment Corp. (LGF, $6.19, +$0.26, +4.38%) swung to a fiscal fourth-quarter profit as the movie and television studio spent much less on distribution and marketing. However, the top line weakened and fell short of expectations. The company said its profitability was driven by a lower theatrical prints and advertising tab and record high digital revenue, as well as strong international and video-on-demand business.
Shares of American Superconductor Corp. (AMSC, $8.11, -$2.58, -24.13%) dropped after delaying its 10-K filing and lowering revenue expectations again, less than a week after announcing a CEO transition. The company's shares dropped 40% in early April when it cut its guidance for 4Q and the year after its largest customer Sinovel refused to accept some shipments of components and parts. Capstone cuts shares to hold with a $10 price target, saying its relationship with Chinese state-owned Sinovel looks permanently damaged and questioning American Superconductor's ability to complete its acquisition of Finnish power technologies provider The Switch.
Stocks of for-profit colleges ran up in afternoon trading after Reuters reported the U.S. Department of Education is getting set to release its much-anticipated "gainful employment" rule. Details weren't available but a source confirmed to Dow Jones that Hill staffers are being briefed on the rule. School operators Apollo Group Inc. (APOL, $42.19, +$1.08, +2.63%), Career Education Corp. (CECO, $22.87, +$1.37, +6.37%) and Corinthian Colleges Inc. (COCO, $3.99, +$0.13, +3.37%), expected to be hit particularly hard based on an earlier proposal, all traded higher. The rule, tying access to federal student aid to graduates' debt loads, is intended to ensure vocational programs train students for real jobs.
Ashford Hospitality Trust's (AHT, $13.75, -$0.52, -3.64%) 2011 stock surge should be complete, says FBR as it downgrades its stock-investment rating on the hotel owner to market perform. Ashford is up nearly 60% since FBR upgraded the stock in January, reaching its $14 price target in the meantime and setting an all-time high Tuesday. The rally has been helped by a property-portfolio purchase through bankruptcy court and the potential of a big dividend increase. Recent payouts have been about 25% of Ashford's cash available for distribution; it had been upwards of 80% before the financial crisis, notes FBR.
Standard & Poor's Ratings Services said it is examining Ashland Inc.'s (ASH, $66.95, -$1.39, -2.03%) ratings for a possible downgrade following its announcement of a $3.2 billion acquisition.
BankUnited Inc. (BKU, $28.11, -$0.25, -0.88%) is nearing an agreement to buy New York-based Herald National Bank (HNB, $4.13, +$0.34, +8.97%), Bloomberg News reported Tuesday, citing a person with direct knowledge of the matter. A deal might be announced as soon as this week, the person said.
Comverse Technology Inc. (CMVT, $7.75, +$0.32, +4.31%) shares reached a 2011 high Wednesday as the telecommunications software maker filed its annual report and anticipates releasing fiscal first-quarter results the next several weeks. The company has been caught under an accounting mess and options-backdating scandal, resulting in Nasdaq delisting the stock four years ago. Relisting could occur as soon as next month. Meanwhile, FBR says fiscal-year revenue and margins for Comverse's namesake business was stronger than expected.
Daktronics Inc. (DAKT, $11.74, +$0.99, +9.21%), which makes large-screen electronic displays, swung to a bigger-than-expected fiscal fourth-quarter profit as the company's live events and commercial segments continued to drive sales growth.
Take profits on H.J. Heinz Co. (HNZ, $53.72, -$1.20, -2.19%), Goldman Sachs says, which cut the ketchup maker to sell from neutral on expectations that Heinz will lag peers over the next year. Heinz trades at a premium but organic growth has begun to slump, "a recent phenomenon that we expect to continue." Growth in developed markets looks vulnerable, the firm says, due to slowing innovation and under-investment in marketing. Emerging markets, a key focus during last week's analyst meeting, is promising, but is "still nascent and faces execution risk."
Juniper Networks Inc. (JNPR, $32.97, -$3.64, -9.94%), which has contracts with the U.S. government, is not immune to reduced federal spending, company Chief Executive Kevin Johnson said at a conference, according to a CNBC report Wednesday. The CEO also said Juniper's supply chain could see a negative impact from the massive earthquake Japan suffered in March.
Inergy L.P. (NRGY, $35.37, -$1.72, -4.64%) said its offering of 9 million common units priced at a $36, a 2.9% discount to Tuesday's closing price as the propane supplier and distributor looks to repay borrowings and help fund ongoing expansion projects in its midstream business, among other purposes.
Finland-based Nokia Corp. (NOK, $6.69, -$0.33, -4.70%) fell further Wednesday as analysts slashed forecasts amid concerns that the world's largest handset maker may struggle to pull off a turnaround quickly enough to halt the continuing decline in its market share. Separately, Nokia denied Wednesday that it is in talks to sell its core handset business to Microsoft Corp., dismissing market speculation that had moved its stock price.
Orexigen Therapeutics Inc. (OREX, $3.34, +$0.51, +18.06%) will provide a regulatory update Friday on its weight loss pill Contrave, which was rejected by the FDA in February with the request for another clinical trial to study the drug's long-term cardiovascular risk. Orexigen and partner Takeda (TKPYY, $23.76, +$0.09, +0.38%) were planning a meeting with the FDA to discuss that trial, but said its feasibility was unclear because of cost, duration and success probability. JMP Securities analyst Charles Duncan expects Orexigen to either detail a "capital efficient" clinical study plan, or drop the program altogether to focus on licensing another drug candidate.
Red Robin Gourmet Burgers Inc.'s (RRGB, $37.88, +$1.18, +3.22%) shares continue May's surge after announcing tests of a significantly smaller restaurant and may expand its 2012 development plans. "If returns meet expectations, we believe this smaller footprint could provide significant additional" store growth the next several years, says Sterne Agee. But it did cut its EPS targets this year and next on Red Robin as the company doesn't plan to further pay down principle on its term loan this year. Shares are up 76% this year amid stellar fiscal first-quarter results and just shy of a 3-year high.
Sealed Air Corp. (SEE, $23.84, -$1.71, -6.69%) said it would buy cleaning-products maker Diversey Holdings Inc. for $2.9 billion in cash and stock, as the packaging-goods company looks to diversify by selling an expanded line of products to its current customers.
Needham cut its stock-investment rating on French semiconductor supplier Sequans Communications SA (SQNS, $16.95, -$2.22, -11.58%) to hold from buy, noting that following a significant rally in the shares, it now recommends investors wait for a more attractive entry point before accumulating the stock.
Oil and natural gas producer SM Energy Co. (SM, $67.74, +$1.25, +1.88%) unveiled progress in its divestiture efforts, as well as a credit facility that increases its borrowing capacity.
Goldman Sachs lowers price targets and earnings-per-share on asset managers amid weaker equity market expectations and softening equity flow momentum. The firm sees continued stock market weakness and "significant outflows" in equities from retail investors as a headwind for Janus Capital Group Inc. (JNS, $9.75, -$0.58, -5.61%) and Pzena Investment Management Inc. (PZN, $5.56, -$0.47, -7.79%). Though it touts T. Rowe Price Group Inc. (TROW, $59.52, -$3.78, -5.97%) as among the strongest in the industry, Goldman cuts T. Rowe Price to neutral from buy because of its high equity asset mix (over 70%) and says it prefers "more diversification and idiosyncratic stories elsewhere in the sector," such as Blackrock Inc. (BLK, $199.35, -$6.21, -3.02%), which it raises to buy from neutral.
French electrical-engineering and power-management company Schneider Electric SA (SU.FR) Wednesday announced it planned to acquire software company Telvent GIT SA (TLVT, $39.73, +$5.28, +15.34%), yet another move in its strategy to specialize in handling and optimizing networks such as electric grids in emerging markets. The French company has offered to pay $40 a share for 100% of Telvent, which is based in Madrid and listed on the Nasdaq. The operation values Telvent at about EUR1.4 billion, equal to a 36% premium over the average share price in the last three months, Schneider said.
Deutsche Bank cut its stock-investment rating on luxury jeweler Tiffany & Co. (TIF, $73.38, -$2.28, -3.01%) to hold from buy, noting the valuation is fair. The firm said it is downgrading the company due to its strong performance year-to-date, which has brought the valuation to a 10% premium versus other global luxury brands.
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